DOE Outlines the Path Forward for Energy Storage

Grid-scale energy storage system prices have to come down, not just the cost of the actual storage components. At the same time, the value of storage has to be redefined in the energy landscape, according to a new report by the U.S. Department of Energy.

The report is a summation of the storage landscape, both technical and regulatory, and outlines what many in the industry already know. But it also offers some clear indications of where the DOE would like to see support from Congress.

The most interesting aspect of the report is that it was presented on Thursday to the Senate Energy and Natural Resources Committee after being commissioned by committee chairman, Senator Ron Wyden (D-OR). Whether the report can interest the committee in any way to help push storage forward is unclear.

“This is a pivotal time for the storage community, and this report could not have been more timely,” Darrell Hayslip, chairman of the Electricity Storage Association, said in a statement.

The DOE defined four major challenges to the widespread adoption of energy storage: the development of cost-effective energy storage technologies, validated reliability and safety, an equitable regulatory environment, and industry acceptance.

In terms of cost-effectiveness, the DOE focused on the need for cheaper systems, not just cheaper components. “The storage component still constitutes only 30% to 40% of the total system cost, thus the focus needs to be on the entire system,” the study finds.

The report goes on to outline the various uses for storage, beyond just saving power until it is needed later. Other ways in which storage provides value include spinning and non-spinning reserves, ramping support for renewables, distribution upgrade deferral and voltage support, and customer-side meter storage.

Many of the barriers to the value of storage are embedded in outdated energy markets. There have been changes in particular states and also some shifts at the federal level, such as FERC's Order 755. In PJM, the implementation of Order 755 has already tripled the use of faster frequency regulation.

The DOE, which has various departments working on storage issues, outlined near-term and long-term performance targets for grid storage, including a AC storage system capital cost of under $250 per kilowatt-hour and more than 4,000 cycles in the short term.

"Increased transparency into project performance and economics will be needed to help move the sector forward,” said Zach Pollock, senior analyst with GTM Research.

Besides bring cost down and aligning the correct value to storage, the DOE also wrote in the report that quantitative analytics will be critical to move the commercialization of storage forward. The DOE is planning for targeted analyses and tool development in the following areas:

Component-cost modeling

Electric power system analysis and technical support

Collaborating with states and regions (particularly California)

Analysis of demonstration projects

Planning tools development

Codes and standards for market acceptance

The report did not ask for additional funding or congressional support for any one area of research and development, but instead laid out the various challenges and promises of storage in the hopes that it piques the interest of Congress beyond Wyden.

“I’m looking forward to working with Secretary Moniz to find ways to implement the DOE’s recommendations to make energy storage an integral part of our country’s electricity grid,” Wyden said in a statement. The question is who else is looking forward to prioritizing energy storage in a divided Congress.